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AS & A Level · AS/A Level

Economics

Elasticity, policy and market failure

Name: ____________________Date: October 10, 2026
  1. 1.

    A price rises from 10 to 12 and quantity demanded falls from 100 to 80. Using initial values as percentage bases, calculate price elasticity of demand and explain the change in total revenue.

    [4 marks]
  2. 2.

    Explain one channel through which a rise in a central bank's policy interest rate can reduce inflation, and give one limitation.

    [4 marks] · no calculator
  3. 3.

    Explain why a negative production externality can cause overproduction relative to the socially efficient output.

    [3 marks] · no calculator

Original, unofficial practice questions from SubjectScout — not official past-paper questions.

Marking points are indicative, not an official mark scheme. Accept equivalent valid methods and supported interpretations that address the task; award each mark once without requiring the model wording.